Takaful and Islamic Cooperative Finance

The Islamic principles of brotherhood, mutual help, cooperation and solidarity amongst Muslims are the vital attributes of takaful or Islamic insurance. In the context of disasters and changes in saving trends, the concept of takaful has been pushed forward by the Islamic finance industry. In addition to the ethical and responsible characteristics of Shari[ah-compliant investments, which attract more and more customers, takaful provides two things: safety and savings. In the takaful strategy, the customer’s share of risk drives towards a solidarity endowment. Donors of the fund decide to share certain financial damages which are compensated out of demarcated financial resources. This kind of programme provides the customers with a wholly Shari[ah-compliant substitute to mainstream life insurance with attractive returns. The crucial difference between conventional and Islamic insurance or takaful is that the latter is Shari[ah-compliant and is based on the Islamic principles of trusteeship and cooperation. The Takaful industry is 35 years old compared with conventional insurance which is more than 270 years old. It is therefore important that more studies on takaful are conducted. There is a dearth of books on takaful which makes it difficult for those who are keen to understand the concept and operation of takaful to find clear and objective texts on the subject. The book under review is a timely and good source reference for those interested in learning more about takaful and what advantages it has over conventional insurance.